Impact of Trade Openness and Foreign Direct Investment on Agriculture Sector: Evidence from Pakistan
Keywords:
Agricultural value added, foreign direct investment, WDI, Trade OpennessAbstract
This study finds the impact of trade openness and foreign direct investment on agriculture sector.The analysis based on time series data during the period 1975-2018. For the empirical investigation of model statistical and econometric techniques have been approached. Firstly, to check the stationarity of data Augmented Dickey Fuller Unit root test has been applied and the study finds the mixed results of stationarity econometric technique like auto regressive distributed lag has been approached. The data is collected from World Development Indicator (WDI).Constructed the model by using agricultural value added as dependent variable while foreign direct investment, trade openness, urban population and gross fixed capital formation worked as explanatory variables. There is positive relation of agriculture with trade Openness, foreign direct investment, but negative gross fixed capital formation. The findings of the model verify that there is a long run association between the variables. This study verifies that agriculture sector is support of Pakistan economy and a major source of employment and exports.